Estimated reading time: 4 minutes
- Collaboration between Africa and the Gulf Cooperation Council (GCC) States is important to achieve diversification and prosperity as the Global South enters a period of significant opportunity with Africa.
- The GCC is focussed on diversification and green initiatives.
- Collaboration with Africa is placed to secure the supply chain.
Africa has been in increasing its foothold in the global economy for a number of years. With the Global South enjoying new influence and wealth, the world’s economic centre of gravity is no longer under Western dominance. The volume of South-South trade has now surpassed the volume of North-South trade, reaching US$5.3 trillion – showcasing the growing connections between countries in the Global South.
The South-South shift is not just about increasing trade volumes, but about an evolving landscape with highly diversified economies. Africa is rich in natural resources but is also actively diversifying its economic activities, with fast-growing sectors like telecommunications, energy and renewables, and Agri-tech taking the reins. The Gulf Cooperation Council’s (GCC) own journey towards economic diversification complements Africa’s aspirations for sustainable growth and infrastructure renewal. In this context, there stands a real opportunity for Africa and GCC states – to strengthen their ongoing relationship for mutual benefit.
Double down on diversification
For GCC nations, these diversification journeys are not recent developments. Looking back at the Gulf’s own transformation, states like the UAE and Saudi Arabia have been transformed from desert landscapes into some of the world’s most advanced trade, logistics, finance and technology hubs by the end of the 20th century, with both undergoing profound transformations. It is evident that over the past decade, unprecedented levels of economic progress, foreign and domestic investment, demographic growth and high-profile cultural and public-sector projects across the Gulf region have catapulted Gulf Cooperation Council (GCC) countries onto the global stage.
Diversification – through ambitious projects to enhance infrastructure, real estate, and tourism – across GCC countries has been a successful strategy in unlocking new opportunities and revenue streams. Tapping into this further will remain a priority in years to come. An example is the Saudi Vision 2030, a government programme with the goal of diversifying the country economically, socially, and culturally. The vision includes forming new international partnerships, creating diverse job opportunities, and attracting global talent to build Saudi Arabia as a global trade hub. Similarly, the UAE’s Energy Strategy 2050 seeks to channel funding into energy efficiency, drive R&D and innovation in energy technologies, and encourage investment in the UAE’s renewables.
Powering the GCC’s diversification goals
For Africa, the GCC’s focus on diversification and green initiatives represents an opportunity for collaboration and growth. Across the globe, environmental, social, and governance (ESG) standards are at the forefront of investment considerations, with climate initiatives remaining a top priority. The climate crisis continues to intensify, with stories of floods and droughts regularly gripping headlines worldwide. This is accelerating the urgency to transition to sustainable energy sources.
Africa has an abundant resource base that can help power the GCC’s energy transition. The continent is home to around 30% of the world’s mineral reserves, including up to 90% of its platinum and chromium, alongside large deposits of lithium, phosphate, and nickel – and the global demand for these resources is escalating. As countries transition to renewable energy, the demand for critical minerals will increase due to their essential role in manufacturing batteries for electric vehicles and other clean energy technologies. This creates an opportunity for GCC nations and Africa to collaborate and secure the supply chain for the critical minerals that will drive the green energy revolution.
GCC countries are in a prime position to bridge Africa’s infrastructure gap. Having built its metropolises from the ground up just decades ago, it has unparalleled experience in modern infrastructure development, and as such, unique insights into the infrastructure challenges that many African nations face. In recent years, the UAE and Saudi Arabia have invested heavily in Africa’s ports and logistics networks.
As the UAE and Saudi have diversified, they are seeing more and more opportunity in Africa. In 2023 alone, GCC companies announced 73 foreign direct investment (FDI) projects in Africa, totalling more than $53 billion.
The UAE’s Dubai Ports World (DP World) has built and expanded key ports to streamline logistics and supply chains, helping Africa to connect more efficiently with global markets. Its projects—like those in Senegal, Egypt, and Tanzania—offer direct improvements to trade routes, cutting down both time and costs for goods moving in and out of Africa.
A golden age of Global South growth
Collectively, GCC countries have invested over $100 billion in Africa over the past decade, as they continue to cement long-term partnerships with African governments and businesses. Combining efforts to diversify and expand will unlock new opportunities for economic development and resilience—and herald a new dawn in South-South cooperation.
